Correlation Between Vanguard Total and Cambria Value
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Cambria Value at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Total and Cambria Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Cambria Value and, you can compare the effects of market volatilities on Vanguard Total and Cambria Value and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Total with a short position of Cambria Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Cambria Value.
Diversification Opportunities for Vanguard Total and Cambria Value
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and Cambria is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Cambria Value and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Value and Vanguard Total is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Total Bond are associated (or correlated) with Cambria Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Value has no effect on the direction of Vanguard Total i.e., Vanguard Total and Cambria Value go up and down completely randomly.
Pair Corralation between Vanguard Total and Cambria Value
Considering the 90-day investment horizon Vanguard Total is expected to generate 3.59 times less return on investment than Cambria Value. But when comparing it to its historical volatility, Vanguard Total Bond is 2.3 times less risky than Cambria Value. It trades about 0.03 of its potential returns per unit of risk. Cambria Value and is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,681 in Cambria Value and on August 28, 2024 and sell it today you would earn a total of 576.00 from holding Cambria Value and or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Bond vs. Cambria Value and
Performance |
| Timeline |
| Vanguard Total Bond |
| Cambria Value |
Vanguard Total and Cambria Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Cambria Value
The main advantage of trading using opposite Vanguard Total and Cambria Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Cambria Value can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cambria Value will offset losses from the drop in Cambria Value's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Real Estate |
| Cambria Value vs. WisdomTree 9060 Balanced | Cambria Value vs. RPAR Risk Parity | Cambria Value vs. Cambria Tail Risk | Cambria Value vs. Aptus Defined Risk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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